Influencer marketing is rife on social media

We've all seen the posts of famous celebrities and influencers touting the latest luxury bag, sporting a shiny new Rolex and sharing 'spontaneous' photos wearing branded fashions. While a loose set of laws prevails over the integrity of posts, sponsored and advertised content, what consumers do not necessarily know is the earning value attributed to these posts.

Sponsored content is everywhere

According to the Truth in Advertising organisation, it’s getting harder to distinguish advertisements from objective editorial content. Since January, more than 200,000 posts per month on Instagram have been tagged with “#ad”, “#sp” or “#sponsored”, according to Captiv8, an analytics platform that connects brands to social media “influencers”. Hiring such influencers allows companies to reach a vast network of potential customers.

Social media is key to reaching millennials and brands are trying novel ways to speak to them via ads, stories, celebrity endorsement and engagement. Snapchat, another picture-sharing app, reaches 40 percent of all American 18 to 34 reports the Economist.

“When we look at millennials and look at how brands want to follow this audience, the questions are: how do you get in front of where these millennials are?” stated Krishna Subramanian, one of Captiv8's founders. “They’re not going to be on TV anymore. You’re not going to get them to click on a banner ad.”

Last year top performers on each platform were getting paid anywhere from 20,000 to 50,000 dollars for six-second to 15-second long posts. Instagram has since transformed parts of the fashion industry as it has become an increasingly important medium for higher-end brands and product placement.

While advertisers are relying more and more on native ads, they are expected to spend more than 8 billion dollars by 2018, and are spending more than 250 million dollars every month on influencer marketing. A recent analysis of the top 100 news sites by the Online Trust Alliance (OTA) found that a majority were not properly disclosed as ads. One in four influencers were asked not to disclose their connection to the company, according to a survey by SheSpeaks reported in AdAge. Yet, more than 90 percent of consumers trust influencers more than ads or traditional celebrity endorsements, recent research disclosed.

Photo credit: Pixabay and Captiv8, The Economist